Reasons for choosing a research topic
Along with the development and integration of the Vietnamese economy, the real estate market The property has had very active times, playing an important role in promoting socio-economic development However, the negative impact from the world financial crisis and the economic difficulties have made this market show many signs of instability and fall into a state of recession However, not every segment of the real estate market falls into this situation In fact, this situation opens up a new direction for the real estate market, which is the home loan segment This is a very promising investment channel because the demand is absolutely real and huge, and is identified as a key strategic program of the country at the moment. Once this product segment develops well, it will certainly not only help the real estate market prosper but also have a positive impact on the whole economy The only problem is how to make this need come true? The answer to the above question must originate from the connection between the real estate market and the credit market Once a popular credit growth channel, the downturn in the real estate market has led to a narrowing of real estate lending activities at banks The new direction in the real estate market forces this activity to focus on the real demand for houses to live in from individuals And this is the cause of the new race of Vietnamese banks today.
Not out of the above trend, Asia Commercial Joint Stock Bank (ACB) - Thanh Khe Transaction Office is also paying close attention to this product segment If this credit activity is highly effective, it will not only help the bank understand the needs of the market, increase market competitiveness and profit Therefore, banks should promote and focus on the lending segment of individual customers to bring more benefits to the bank To learn, analyze and offer solutions for lending activities to buy houses of Science and Technology at Asia Commercial Joint Stock Bank -Thanh Khe Transaction Office Therefore, I choose the topic "Analysis of home loan activities at Asia Commercial Joint Stock Bank - Thanh Khe TransactionOffice, Da Nang.
Research Objectives
Systematize the theories of bank lending in general and home loans for individual customers at commercial banks in particular.
Analyze and evaluate the effectiveness of home loan activities at ACB Commercial Joint Stock Bank - Thanh Khe Transaction Office, Da Nang.
Recommendations and solutions to improve the efficiency of home loan activities at ACB Commercial Joint Stock Bank - Thanh Khe Transaction Office,
Research questions
Realizing home loan activities of Asia Commercial Joint Stock Bank at Thanh Khe Transaction Office - Da Nang ?
Solutions to improve the efficiency of home loan activities at AsiaCommercial Joint Stock Bank, Thanh Khe Transaction Office - Da Nang ?
Subject and Scope of Research
The object of lending activities are individual customers at ACB Commercial Joint Stock Bank - Thanh Khe Transaction Office.
Research scope at ACB - Thanh Khe Da Nang Transaction Office in the period of 2020 - 2022
Research Methods
The research method is based on quantitative methods, analytical and synthesis methods The research data source is based on data provided from ACBBank - Thanh Khe Transaction Office and legal regulations in Vietnam.
Structure of the topic (Research Outline/Layout)
Chapter 1: Theoretical basis of commercial banks' home loan activities
Chapter 2: Actual situation of home loan activities of ACB - Thanh Khe Da Nang Transaction Office
Chapter 3: Solutions to improve home loan activities for science and technology at ACB - Thanh Khe Transaction Office
THEORETICAL BASIS FOR HOME LOAN ACTIVITIES OF
Theoretical basis for lending activities of commercial banks
1.1 The concept of lending activities of commercial banks
Pursuant to the Law on Credit Institutions , Circular No 39 /2016/TT - commercial banks: “ Lending is a form of credit extension whereby a credit institution assigns or commits to hand over an amount of money to the customer for use used for a definite purpose, within a certain period of time as agreed on the principle of repayment of both capital and interest.”
1.2 The role of commercial lending activities
The lending activity of commercial banks is the basic activity of connecting idle capital with those who really need capital in the economy and creating a large amount of money in the economy.
Lending activities of commercial banks provide finance to customers. Commercial banks lend money to customers to support their personal and business activities This helps customers get financial resources to invest in new businesses, buy houses, cars, cover daily expenses or pay off other loans.
Lending activities of commercial banks help banks to generate profits, commercial banks earn interest from lending money This interest rate is calculated based on the loan and loan period Commercial banks use profits from lending to pay employees, invest in technology , grow capital, and grow business.
The lending activities of commercial banks also help the bank to build more and more sustainable relationships between customers and banks by providing good and effective lending services The fact that the bank attracts many new customers and maintains good relationships with old customers contributes to the expansion of the credit market.
In addition, lending activities help to generate stable financial income Interest from lending activities of commercial banks provides a stable source of financial income for the bank, helping the bank to rely on for development and invest in new products and services, improve infrastructure, and strengthen credit risk management and ensure future sustainability.
1.3.3 Classification of commercial banks lending activities
Consumer loans , in Clause 1, Article 3 Circular 43/2016/TT- commercial banks, “Consumer lending is the lending by a financial company in Vietnam for individual customers in order to meet the capital demand for purchasing and using goods and services for customers consumption purposes of the customer, the customer's family" For consumer lending, the loan amount can range from a few million to hundreds of millions of dong depending on the needs of the customer and the borrower's financial ability Loan terms are typically between 6 months and 5 years depending on the loan and the lender's agreement Consumer lenders include people who need to borrow money to cover personal or family expenses, have no collateral and are able to repay according to an agreement with a bank or credit institution Consumer loans are typically used to pay for personal expenses, consumption or training expenses, but can also be used for small business purposes. Business borrowing is defined as lending money or assets to invest in one or more different businesses, including equity investment, fixed asset investment, purchase of goods, liquidate investments or pay payables in the course of business operations Business lending is a credit activity Used by banks to support businesses, organizations or individuals that need to borrow capital to expand their business or invest in business activities When making business loans, banks will often require these loans to be secured by the customer's assets, and these loans can be paid in installments or in full at a time after a specified period of time. determined Business loan purposes include loans to purchase fixed assets, loans to invest in business expansion, loans to invest in fixed assets and loans to supplement working capital.
1.3.2 According to the loan term
The loan term is defined in Clause 8, Article 2 of Circular 39/2016/TT- commercial banks regulating lending activities of credit institutions and foreign bank branches to customers authorized by the State Bank of Vietnam Nam issued as follows: “Lending term is the period counting from the next day of the day the credit institution disburses the loan to the customer until the time the customer has to pay off the loan principal and interest according to the terms of the loan agreement agreement between the credit institution and the customer.”
According to Time Loan terms and credit activities of commercial banks are divided into three types short-term loans, medium-term loans and long-term loans. Short-term loans are forms of unsecured loans or mortgages at banks or financial companies According to Article 10 of Circular 39/2016/TT-NHNN , short-term loans are loans with a maximum loan term of 01 (one) year
Medium-term loans are a popular form of borrowing at most banks and credit institutions today According to Article 10 of Circular 39/2016/TT-NHNN, customers will receive financial support for a term from 12 months to 60 months (from 1 year to 5 years) Mid-term loans will help solve capital needs business, customer consumption and reduce financial pressure because you will have payment flexibility in the longer term However, the payback period is slow, so it can be accompanied by some risks for the bank.
Long-term loan according to Article 10 of Circular 39/2016/TT-NHNN, long- term loan is a form of loan with a term of more than 5 years The loan will be assessed by the bank according to the needs and documents to decide the loan term. Long-term loans often apply large loans such as home loans, real estate loans, loans to mobilize capital for production and business, car loans, etc.
1.3.3 According to the loan guarantee method
Pursuant to the Law on Credit Institutions No 02/1997/QH10 dated December
12, 1997, " Loan security is the application of measures by a credit institution to prevent risks, create an economic and legal basis for the recovery of loans already lent to customers.
Loans secured by assets are loans made by credit institutions whereby the borrower's debt repayment obligations are committed to be secured by pledged or mortgaged assets, assets formed from Loans borrowed by customers or guaranteed by assets of a third party
Unsecured lending, also known as unsecured loans , is a type of loan without collateral, pledge or guarantee of others, but only based on the creditworthiness of the borrower to decide loan.
1.3.4 According to the loan repayment method
Installment loan is a type of loan where the customer has to repay the principal and interest periodically This type of loan is mainly applied in real estate loans, housing loans, consumer loans, loans for small businesses, loans for technical equipment in agriculture.
Loans with only one repayment term, also known as one-time repayment loans at maturity.
Loans to repay many times but without a specific repayment period, depending on the financial ability of the borrower, they can repay at any time.
2 Theoretical basis for home loan activities of commercial banks
Housing is regulated in the Law on Housing 2014 and is explained in Clause
1, Article 3 as follows : "House is a work built for the purpose of living and serving the daily-life needs of households and individuals "
2.1.2 Attributes and characteristics of the house
Individuals and households have legal ownership or use rights (also called sovereignty) in housing/apartment/land plot projects when they have legal papers and are allowed to trade/transfer transfer in accordance with the provisions of current law.
2.2 Home loan activities of commercial banks
SOLUTIONS TO COMPLETE HOUSING ACTIVITIES FOR
Objectives and orientations of Thanh Khe Transaction Office ACB Bank
With the goal of maintaining the title of being the best retail bank in Vietnam, ACB in general and Thanh Khe Transaction Office in particular are gradually striving for strong growth in both size and quality In the next period, Thanh Khe transaction office will go through a new development phase, striving to build and promote the ACB brand to a new level.
Although in the past years Thanh Khe Transaction Office ACB has achieved significant growth, in order to stand firm and continue to develop in an environment where competition is increasingly fierce as today, Thanh Khe transaction office must build for own a strategy and specific goals: Stable and sustainable growth, good risk control to ensure safety, expand operating markets, perfect company culture To accomplish the above goals, the branch has set the development orientation in the coming time as follows:
Credit growth on a prudent basis, ensuring growth in a stable, safe and effective manner Continuous home loans activities are based on the principle of
"Conservative lending" Continue to manage credit quality according to international practices and standards Increase the proportion of home loans for science and technology and the proportion of loans to buy houses with collateral.Pay more attention to the quality of products and services, enhance the improvement of business processes and diversify products and services While actively developing new products to promptly meet the increasingly diverse borrowing needs of customers, while focusing on exploiting products and services that are transaction Office strengths.
Actively seek out customers to advise on new products and accelerate home loan business to achieve the goal of loan balance growth, improve and well implement credit management methods, keep debt ratio too high term less than 3%. Continue to promote customer care, further strengthen advertising and communication activities, expand market share to lines and residential clusters in the province and surrounding areas.
Continue to pay attention to internal human resource training activities, attract new human resources, build a team of staff with professional ethics, sense of organization and discipline and high sense of responsibility have the skills and expertise to do the job well Invest heavily in the information technology system, in order to establish online transactions throughout the system to better serve customers Link with real estate market centers, to find customer needs.
In the past time, home loans activities for individual customers of commercial banks in Vietnam in general and Thanh Khe transaction office ACB in particular have made remarkable progress and increasingly diversified product forms products However, the home loan activity still has many problems and risks that need to be solved, perfected and overcome in order to move towards a more complete and better home loan product Therefore, the analysis and assessment of home loan situation at Thanh Khe Transaction Office is necessary and important.
Solutions to complete home loan activities for science and technology at
at ACB - Thanh Khe Transaction Office
3.2.1 The main solution comes from Thanh Khe Transaction Office ACB 3.2.1.1 Solutions to complete home loans for low-income customers
Today, the competition between banks is very big especially in home loan activities when banks realize the potential from the market as well as from this product package Therefore, reasonable customer segmentation along with appropriate lending policy will help the bank not to miss potential customers as well as have the advantage to rise above the rest Therefore, transaction office should pay more attention to low-income customers This is a large number of people and the demand for housing is always permanent Therefore, it is necessary to have a suitable lending policy for this object On the other hand, PGD can also link more with low-cost housing and apartment projects to prioritize serving this audience.
In addition, Thanh Khe Transaction Office ACB should study specific lending support policies for low-income people such as interest rates, terms, preferential conditions (on repayment grace, etc.) equity participation rate, loan and property insurance, debt management and bank risk treatment) to ensure the effective promotion of social housing policy, ensuring balance and harmonization of interests of the parties Although this lending policy is specialized, it is not exclusive, but it is necessary to expand its implementation at commercial banks to facilitate access to capital for borrowers, be competitive and comply with the law international rate.
To create and develop synchronously the basic elements of a particular market
- "affordable housing market" - for customers with low and middle incomes The first important issue is to create "special goods - affordable housing" and promote the segment of the affordable housing market, then they will directly use the new home to benefit from it just having to spend a little less money and still satisfy their housing needs In this case, affordable housing will be targeted at serving low- income people To create "goods specific characteristics - affordable housing", it is necessary to meet the following criteria: housing must be planned to be developed into separate areas, have minimum service infrastructure standards, be located far from the center and service areas- commercial (for the lowest land price), in terms of architecture - design - construction, must strive to save costs, lower costs, including only the minimum costs to ensure basic needs (in terms of area size, durability and structure, essential operating costs) Minimizing cost is not only to reduce exchange value, but also to limit the quantity demanded for this type of product this housing.
3.2.1.2 Solutions to improve the prevention of bad debts, limit risks before and after buying a house
The risk in home loan activities is mainly credit risk, which is the possibility of not being able to repay the principal and interest to the bank when the customer encounters the risk of unemployment, violating the law subject to a high penalty, health problems leading to incapacity to work, may be due to the bankruptcy of the business or related to litigation Therefore, in order to limit this risk, Thanh Khe Transaction Office ACB needs to associate with other banks insurance company (or ask customers to buy insurance) to offer home loan products that are insured against loans, life insurance and possibly fire and other perils insurance mortgaged real estate equal to the loan amount Loan capital will be insured in the form that when the customer has an accident, the risk of not being able to pay the debt, the insurance company will pay part or all of the debt The insurance period will last from the time the bank disburses the loan until the customer pays off the debt This measure not only ensures the safety of the bank's loan capital, but customers also enjoy insurance services and do not have to pay insurance fees, which will contribute to attracting more customers.
Measures to prevent loans leading to overdue debt are always noticed These measures need to be taken as soon as transaction office checks the purpose of using capital of the customer, if there are signs of the customer leading to bad debt risk,the transaction office needs to apply some preventive measures In addition, the transaction office needs to ask the customer to provide additional special assets to increase the bank's capital in case the collateral is reduced in price At the same time, Thanh Khe Transaction Office ACB needs to encourage customers to be aware of their responsibilities and try to repay the bank's debt In addition,transaction office will actively create favorable conditions for customers such as extending debt, reducing debt or lending further loans to customers whose debts are overdue for less than 6 months so that customers can increase their capital to continue operating business, help customers overcome immediate difficulties and commit to pay off all debts (principal and interest) to the bank when business operations are stable again Credit risk in addition to subjective causes also has objective causes such as natural disasters, policy mechanisms, fluctuations in the economy, death, disappearance Therefore, banks and customers must support each other for all to benefit.
However, Thanh Khê transaction office needs to consider these cases carefully to avoid more damage For overdue debts, transaction office needs to review the issues during the appraisal process to see what mistakes transaction office has made, in which stages and problems, and almost review the financial ability of customers and customers Is the loan used for the right purpose? From there, it will serve as a basis for providing short-term solutions and drawing experience for future credits.
In case the Customer does not intend to repay the bank's debt as committed in the credit contract, the bank will liquidate the special property that the Customer has mortgaged to the bank
3.2.1.3 Promote marketing activities of Thanh Khe Transaction Office ACB
In today's service economy trend, marketing, promotion, distribution channel establishment, communication promotion, advertising and customer care have a very important impact on the development of the banking service market personal goods Because the psychology of individual customers has a habit of imitating the majority, affected by the law of herds in service consumption, especially sensitive services such as banking, telecommunications, and technology information. Therefore, to be able to expand the scale of home loan activities, transaction office must build an effective marketing strategy suitable for the bank, in order to help customers understand products and services, mechanisms, conditions as well as credit business processes, bringing banking products closer to customers Home loan activities always have a long-term relationship with customers (a home loan usually has a period of 10 to 30 years) Therefore, having specific, detailed but flexible policies will contribute to attracting more customers to PGD, creating customers' trust, customers will have a deeper understanding of the product's beneficial features home loan and loan terms.
Enhance the transmission of information to the majority of the public in order to help customers get updated and consistent information, gain a basic understanding of transaction office products and services, and understand the usage and benefits of transaction office banking products Through mass communication channels such as radio, television, newspapers (e-newspapers, websites, magazines), direct marketing can be done via mail, telephone, and outdoor advertisements. Due to the lack of information about the bank's customers, banks need to segment the market to reasonably determine the market structure and target customers, thereby promoting and introducing products and services suitable for each customer On the leaflets, the bank's website needs to introduce in detail about each product and service, as well as the necessary instructions on the customer rights and obligations in a concise and easy to understand manner, helping customers to understand the basics about the service they will use and actively seek out the bank.
In addition, Thanh Khe Transaction Office should regularly provide information on financial capacity and business results through financial statements and audit reports of transaction office, thereby giving customers an overview of the situation banks, increasing customer confidence Besides, transaction office regular customer care activities need to be paid more attention, advising customers about the bank's products and services, customer questions need to be answered promptly through the channels such as: phone, email, website, comment box at transaction points In addition, on the bank website, it is necessary to introduce more about the utility of home loan products, loan conditions, necessary documents, there should be more information about real estate, providing information about apartment projects that affiliated banks lend, housing market price information
Thanh Khe transaction office needs to organize many promotional programs such as the program "ACB Lifestyle - An application that integrates thousands of incentives and gifts for customers including financial incentives and incentives from ACB's partners, namely ACB's partners: famous brands ", lucky draw with meaningful gifts for customers, increasing transaction office lending capacity. Thanh Khe ACB Transaction Office needs to be more active in participating in social activities such as sponsoring a football tournament, a television program or health counseling program, activities to support the poor, disabled people, the image of NH will be more friendly, more reputable to customers, and can attract a large number of potential customers These forms of sponsorship will bring positive effects.
3.2.1.4 Improve professional qualifications, service style as well as professional ethics of ACB staff at Thanh Khe Transaction Office
The way to retain customers for a long time is not modern machinery and equipment anymore, machines still cannot replace humans According to statistics, 90% of customers prefer to interact with a human employee rather than an inanimate machine Thus, the role of a bank employee is very important, not only in terms of their capacity, but also their working attitude Improving the professional qualifications service style as well as professional ethics of bank staff should always be done in parallel, creating a healthy banking culture environment, creating comfort and peace of mind customers when they visit the bank So the transaction office needs to:
Having the right recruitment policy, attracting qualified and ethical people to work at transaction office The human resources department must find people who are qualified and suitable for the position to be recruited, and set specific targets for each position.
For new employees who are recruited into the company or employees who have worked at the bank, they still need regular training to improve their qualifications In addition to allowing employees to study at transaction office training center, it is necessary to create conditions for them to participate in training courses organized by ministries and sectors abroad to gain experience In addition, the arrangement, redeployment of personnel and dismissal of poorly qualified employees also need to be paid attention.
It is necessary to improve the working environment so that employees have an environment to be creative and work at their best Avoid dependence on superiors,always create a competitive environment among employees For Thanh KheTransaction Office, besides highly qualified staff, there must be staff with many years of experience working with transaction office to create safety and certainty in work Improving the environment for employees to bond with each other, regularly exchanging experiences and learning from each other will save a lot of costs for the bank.